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Explanations Needed For Contract Renewal of Panama Ports Company


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OPINION: Explanations  needed for renewal of ports contract

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Posted 24/06/2021

Finally, Panama Ports Company (PPC) obtained the renewal of the operation contract for the Balboa and Cristóbal ports. Its current terms appear to have met the expectations of the company, but little is known about the benefits that the State will receive, except that PPC promised to pay a minimum of million in dividends, which represent about $175 million in 25 years, a sum that it is not the least bit impressive, considering this company's poor compliance record, despite the Comptroller's assurance that it fulfilled all of its obligations. The truth is that PPC paid its first million to Panama just 6 years ago, that is, it stopped paying the State for 18 years. As for its investments, PPC did not make them just to fulfill the contract. These respond to strictly commercial reasons  - I would never have built facilities to keep them idle, without use.

It is clear that their business grew in our ports, but Panama has suffered the loss of its interests due to the unscrupulous conduct of this company, which has treated its partner with great contempt. The Government owes us, more than a statement, comprehensive explanations on the renewal of this contract. – LA PRENSA, Jun. 24

 

https://www.newsroompanama.com/opinion/opinion-explanations-needed-for-renewal-of-ports-contract

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  • Moderator_02 changed the title to Explanations needed for renewal of Panama Ports Company contract
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The mirage of Ports Paradise

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Posted 25/06/2021

The renewal of the concession to Panama Ports Compay (PPC) is a matter of national importance, especially because this company has blocked the attempts of the Panamanian State to establish other ports close to where it currently has those granted and to have laughed at Panamanians with ridiculous contributions in the years that Balboa and Cristóbal have been under is control.

That is why the Panama Maritime Authority, specifically the members of its board of directors, starting with the Vice President of the Republic and Minister of the Presidency, José Gabriel Carrizo, have had to call a press conference to answer the concerns and disclose the documents that support the continuity of the concession and the names of those who gave their approval to this company. If everything is as wonderful as they paint it, the logical thing is to disclose the reason for so much joy and satisfy the questions or doubts that have arisen. But instead, they continue to say nothing and hide behind a statement that, as the saying goes, paper holds everything. Their attitude, far from telling us that everything is fine, tells us that there is a cat locked up and that the paradise they describe to us is just a mirage. – LA PRENSA, June 25.

 

https://www.newsroompanama.com/opinion/the-mirage-of-ports-paradise

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  • Moderator_02 changed the title to Explanations Needed For Contract Renewal of Panama Ports Company
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Panama Ports Company Contract Extended

The Panama Maritime Authority extended for a 25-year term and in favor of the Panama Ports Company, the contract for the development, construction, operation, administration and management of container terminals.

Thursday, June 24, 2021

The Board of Directors of the Panama Maritime Authority declared itself in permanent session as of May 27, 2021, for the purpose of analyzing compliance with Contract Law No. 5 of January 16, 1997, for the development, construction, operation, administration and management of container, ro-ro, passenger, bulk cargo and general cargo terminals with their respective infrastructure, installations, facilities and physical areas in the Ports of Balboa and Cristobal, between the State and the Panama Ports Company, S.A., according to an official statement.

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The document states that "... after more than 20 days of permanent session, today June 23, 2021 and after the presentations of the compliance audit reports by the Comptroller General of the Republic of Panama and the General Directorate of Ports and Auxiliary Maritime Industries of the Maritime Authority of Panama, in addition to the documental review and analysis of the projections of income to the State, the members of the Board of Directors unanimously recognize the fulfillment of the basic conditions of the contract and therefore authorize the Administrator of the Panama Maritime Authority to certify the validity of the second period of the concession contract."

In this second period of validity, the company will have to pay the State a minimum of $7 million per year in dividends, which will be formalized through the signing of a shareholders' agreement, and the rates for container movement of all container terminals in the Republic of Panama will be revised and updated, which will be effective as of 2022.

Based on the projections of income from tariffs (container movement, wharfage) and dividends from the contract in question, income to the State is estimated at over $800 million during the next 25 years, according to the new negotiations.

 

https://www.centralamericadata.com/en/article/main/Panama_Ports_Company_Contract_Extended

 

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Panama Ports sweetens the pot with $150 million

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Posted 27/06/2021

The  Panama Ports Company (PPC) since May 21 sent the Ministry of Economy and Finance (MEF) two pot-sweetener checks with an extraordinary contribution of $150 million.

PPC delivered the checks with future transaction payments that were supposed to be unsecured did it a month before its contract was renewed for the next 25 years and while the AMP told the country that its board of directors was in permanent session, analyzing the request for an automatic extension for the port company to continue operating Balboa and Cristóbal.

The delivery of the checks was reported in Official Gazette 29316-B of June 25, 2021, in which the AMP resolution that supports the automatic renewal of the contract was published.

The contribution of $150 million is broken down as follows: $83 million correspond to 10% of the shareholding; $20 million in dividends paid in advance for the next five years, and a contribution of $27 million in dividends receivable from PPC, to “show solidarity in these critical times”; in addition to another contribution of $20 million for an educational program of the Government.

The $83 million corresponding to the 10% shareholding comes from profits that were accumulated over time and that had not been distributed. The compensation was made just before the contract expired, in 2022.

 

https://www.newsroompanama.com/business/panama-ports-sweetens-the-pot-with-150-million

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OPINION: President deaf to Ports outcry

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President Nito Cortizo

Posted 28/06/2021

The renewal of the port concession contract to Panama Ports Company (PPC) has had the population fired up for a whole week, as the terms in which it was negotiated are unknown. Everyone demands an explanation, as well as a copy of the commitments made by the parties, but they do not appear. But worst of all is the scandalous fact that the President, aware of the collective anger that exists over this matter, has not demanded of his vice president, minister of the Presidency, and president of the board of directors of the Panama Maritime Authority (AMP), José Gabriel Carrizo, to give the necessary explanations, instead of allowing him to hide behind a statement and an expensive advertising campaign that tries to convince us that we have a gold mine in our hands. This topic smells very bad, starting with the President's deafness in the face of so much protest, and continuing with the fact that one of the state negotiators is, simultaneously, a member of the PPC and the WAP boards of directors. Is it that nobody was interested in the serious conflict of interest of the Minister-Counselor José Alejandro Rojas Pardini? The entire board of the AMP, including those who separated from the negotiation, owe explanations to the country. What do you expect to give them? The indifference and how crooked this government is is very worrying. including those who separated from the negotiation, they owe explanations to the country. What do you expect to give them? – LA PRENSA, Jun. 28. 

 

https://www.newsroompanama.com/business/opinion-president-deaf-to-ports-outcry

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OPINION: The Panama Ports disgrace

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Posted 01/07/2021

The Panama Maritime Authority (AMP) maintains that the renewal of the Panama Ports Company (PPC) contract is automatic, that it does not require the intervention of the National Assembly. The clause to which the AMP refers textually states: “The parties agree that this contract will be automatically extended for an additional period of twenty-five (25) years under the same terms and conditions, as long as the company has complied with all its obligations. basic in accordance with this contract ”.It goes without saying that PPC did not meet its commitments, which included, according to the contract, paying a fixed annuity of $22.2 million that, in addition, had to be reviewed every five years, with which, this could vary, based on the average of the consumer price index for the previous five years, up to a maximum of 10%. It also included a variable annuity, consisting of 10% of the gross receipts from all sources of income that come from the activities carried out by the company in ports. For years, Panama did not receive a penny for those obligations, but even so, government negotiators did not object. They are a complete disgrace! LA PRENSA, Jul. 1

 

https://www.newsroompanama.com/business/opinion-the-panama-ports-disgrace

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Business execs seek transparency in Ports contract extension

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Posted 02/07/2021

A day after President Cortizo  presented  his report to the nation while glossing over the renewal of the Panama Ports contract    the Panamanian Association of Business Executives (Apede) joined the voices that ask the Government for greater transparency and analysis of the automatic extension of the 25-year contract

Through a statement, released on July 2, the business union indicated that "there are no clear sources of information that define whether specialized audits have been carried out, which show that investments have been made in the port terminals concessions."

It gave as an example, the need for ports for vessels of greater draft, as this influences the competitive position in the maritime service.

It also considered that the audits should be carried out by independent entities, especially those specialized in port matters, “that verify compliance with the agreement; a process that must be executed with total transparency ”.

In the opinion of Apede members, there is no impediment for the Government to continue negotiating with the company "in order to reach new conditions that represent benefits for the Panamanian State."

"It is essential to clarify what will be the mechanism through which the new agreements will be incorporated into the current Contract Law," the statement added.

On June 23, the Panama Maritime Authority (AMP) authorized the automatic renewal of the contract with PPC to operate the ports of Balboa and Cristóbal for another 25 years.

 

https://www.newsroompanama.com/business/business-execs-seek-transparency-in-ports-contract-extension

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PANAMA’S FAILING NEGOTIATORS

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Posted 16/07/2021

The Laurentino Cortizo government must have the worst negotiators in history. The details to renew the contract with Panama Ports Company (PPC) are still unknown, although we already know that they are worse than the original contract. To top it all, one of the government negotiators was, at the same time, part of the PPC board of directors. On whose side were his loyalties? Two neurons are enough to deduce it, after the shameful result they presented us. Now, the Government announces that it is preparing to do the same, but with Minera Panama, with the difference that they no longer have a current contract, since the one in force was annulled by a Supreme Court ruling. Preparation should begin with a reform of the Mining Code, which currently establishes miseries in royalties for the State. After these reforms, the mining concession should be governed by said code and abandon the contract-law formula. We hope that the new negotiators on the part of the Executive - some of the old guard of the PRD and without the best credentials to assume this task - are not like those who acted in the PPC: delivered,  and raided by rascals. – LA PRENSA, Jul. 16.

 

https://www.newsroompanama.com/business/panamas-failing-negotiators

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OPINION: Mediocrity  at its finest

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Panama Ports

Posted 31/07/2021

When the minutes of the meetings of the board of directors of the Panama Maritime Authority (AMP) are read, which include the interventions of its members on the renewal of the contract with Panama Ports Company (PPC), the superficiality with which the subject was discussed is revealed. Much of the concerns of the managers revolved around legal certainty, always in favor of the company, forgetting that PPC was an abusive partner, and leaving aside the issue of alleged violations of the original contract. So, what was the legal security when analyzing everything that the Panamanian State stopped perceiving due to the tyranny of the PPC? When things are done well, there is no need to fear, but as this is a crooked country, these things happen. The terms of the AMP board of directors are a disgrace. They contrast with the way in which the Canal Authority handled the contract with Grupo Unidos por el Canal, confronting first-world, powerful companies that even threatened to sue Panama. But since things are done better in the ACP, there was no objection to filing a fight in the arbitration tribunals. In the case of PPC, the justifications of cowardice outweighed those of reason. Mediocrity at its finest.- LA PRENSA, Jul. 31.

 

https://www.newsroompanama.com/business/opinion-mediocrity-at-its-finest

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Business Chamber wants better Panama Ports deal

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Posted 05/08/2021

After reviewing and analyzing the minutes of the meetings of the board of directors of the Maritime Authority of Panama (AMP), ThePanama Chamber of Commerce, Industries and Agriculture (Cciap) has called for a “more equitable contract" with Panama Ports Company (PPC) "for the benefit of the best interests of the Panamanian nation."

The Chamber  stressed that "it is imperative that citizens know the result of the audit carried out by the Comptroller General with a view to understanding what the technical considerations were to certify the company's compliance with the previously agreed obligations."

The audit has not been published and the Comptroller's Office responded to a La Prensa request for information, based on the Transparency Law, that it could not provide it because it was "confidential".

Comptroller Gerardo Solís presented a report at a press conference on February 4, 2021, stating that after reviewing the contract the company had complied. Likewise, it was Solís who, during one of the meetings of the AMP board of directors, and after the authorization to renew the contract was approved automatically, proposed to sell PPC the participation of the State in the company, which corresponds to 10% of the Actions.

"Taking into account that there were three addenda that modified the original contract, it was extremely relevant that, as a country," we were emphatic in renegotiating certain terms of the contract, taking as reference the good practices of world maritime trade and the administration of ports of the region".

Likewise, the Cciap adds that it was mandatory to negotiate rates higher than those of the previous 24 years, especially in relation to land leasing and oil transfer. "Thirdly, the elimination of the demands of the company to the Panamanian State had to be agreed, demands that have slowed down the possibility of creating new ports in the Pacific that allow the logistics hub to be strengthened for the next 25 years."

According to the Cciap, administrative and financial audits of port companies must include the advice of technical personnel with extensive experience and experience in the maritime sector.

It stressed that Panama needs to develop its potential in the maritime sector and the port chain, offering added value to the logistics chain because the geographical position and the infrastructure around it constitute the main resource as a country.

 

https://www.newsroompanama.com/business/business-chamber-wants-better-panama-ports-deal

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